Supplier credit note or refund in Morocco: how to record it

A credit note is not income. It cancels a purchase, VAT included, and the account depends on what it corrects.

By BelloCommerce

September 6, 2026

A supplier sends you a credit note for 1,200 dirhams: that is not 1,200 dirhams of income. A credit note cancels all or part of a purchase, VAT included, and the account used depends on what it corrects: a goods return and a commercial rebate are not recorded in the same place.

A supplier credit note and returned goods.

The essentials in five points

A credit note is never income. It reduces a cost or creates a receivable; it does not increase turnover.
VAT is reversed with the credit note. Forgetting that reversal leaves VAT deducted with no matching purchase.
The reason determines the account: a goods return, a commercial reduction, or a straight refund.
The credit note must be a compliant document, numbered and referring to the original invoice.
Credit note and refund are two steps: the first cancels the debt, the second settles it.

1. Identify what the credit note corrects

Before recording anything, you need to know why the credit note exists. Three reasons cover almost every case and do not call for the same treatment.

Reason	What the credit note corrects	Treatment
Goods returned	The purchase itself no longer stands	Cancel the purchase for the portion returned
Non-conforming or missing goods	Part of the purchase invoiced wrongly	Partial cancellation of the purchase
Rebate or discount outside the invoice	The price, not the quantity	A commercial reduction obtained, in its own account
Goodwill gesture or settled dispute	A negotiated consideration	To be characterised per the agreement, with your accountant

The distinction between a return and a rebate matters more than it looks. A return reduces the quantity purchased and must be reflected in stock; a rebate changes nothing in stock, only the price paid. Confusing the two distorts stock valuation as much as the income statement.

2. The entry for a credit note on a return

Take the purchase of 10,000 dirhams excluding VAT, VAT at 20%. You return 1,000 dirhams of goods excluding VAT, so the credit note is 1,200 dirhams including VAT.

Account	Description	Debit	Credit
4411	Suppliers	1,200	—
6111	Purchases of goods for resale	—	1,000
34552	State — recoverable VAT on costs	—	200

The entry is the exact reverse of the original purchase, for the portion cancelled. The debt to the supplier falls, the cost falls, and the VAT originally deducted is reversed. If the goods have physically left, the stock movement follows.

3. Rebates, refunds and neighbouring cases

Not every sum received from a supplier is recorded the same way, and two of them are regularly misclassified.

A rebate obtained outside the invoice: It is recorded in a rebates and discounts obtained on purchases account, reducing purchases without touching the purchase account itself. Readability gains: you see what you bought and what you negotiated.
A refund into the bank: The credit note has already cancelled the debt; the transfer received simply clears the supplier account, which had gone into debit. It is not income.
A credit note offset against a later invoice: Nothing is collected: the supplier account absorbs the credit note and the next invoice. Check the matching rather than the overall balance.
A credit note with no identifiable original invoice: To be reconciled before recording. A credit note attached to nothing is a warning sign, not a windfall.

The supplier account can therefore go into debit, which is perfectly normal between the credit note and its refund. What is not normal is for it to stay there: an old debit balance signals a refund never claimed.

Never record a credit note as income

This is the most tempting and most visible shortcut of all. A supplier credit note is not a receipt: it corrects a purchase. Recording it as income inflates turnover and costs at the same time, distorts every margin, and leaves the originally deducted VAT in place when it should have been reversed. The error therefore propagates into both the result and the VAT return.

4. Check that the document is compliant

A credit note carries a VAT reversal. On that basis it must meet the same formal requirements as an invoice.

Check that it carries its own number and date.
Check that it references the original invoice, without which reconciliation is impossible.
Check the identification of the supplier and of your own business.
Check that VAT appears separately, at the rate originally applied.
Reconcile it to the return note where the reason is a goods return.
File it with the invoice it corrects, not in a separate pile.

A poorly documented credit note is the mirror image of a non-compliant invoice, and it shows up just as quickly. The formal conditions are the same as those set out for recoverable VAT.

BelloPOS

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Mistakes to avoid

Booking a supplier credit note as income.
Forgetting to reverse the VAT deducted originally.
Treating a rebate as a return, and distorting stock.
Recording the credit note and the refund as a single event.
Accepting a credit note with no reference to the original invoice.
Leaving a supplier account in debit without claiming the refund.

Frequently asked questions

Is a supplier credit note income?

No. It cancels all or part of a purchase and therefore reduces a cost, or creates a receivable from the supplier. It never enters turnover.

Does VAT have to be reversed on a credit note?

Yes. The VAT deducted on the original purchase must be reversed to the extent cancelled. That is why the credit note must show VAT separately and reference the original invoice.

What is the difference between a return and a rebate?

A return cancels a quantity purchased and must be reflected in stock. A rebate reduces the price without changing the quantity, and is recorded in a reductions obtained account. Confusing them distorts stock valuation.

What if the supplier does not refund?

The supplier account stays in debit, which represents a receivable. Claim the refund or have the credit note offset against a later order, and track that balance like any other receivable.

Does BelloPOS handle supplier credit notes?

Supplier returns belong to the purchases module, available from BelloPOS Go, which lets you adjust the stock received. The accounting entry and the VAT reversal belong to the accounting side, in Pro or at your accountant’s.

What to take away

A supplier credit note is read before it is recorded: what it corrects determines the account, and VAT always follows. A return that touches stock and a rebate that touches price are not the same transaction, and the credit note only becomes a cash movement at the refund, never before.